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Since wireless subscriptions in the US are running at about 100% penetration, it’s possible to classify the wireless subscribers as representative of the entire population. So it’s safe to categorize the population of the US by the phone OS they carry.

The left part of the chart shows data from Nielsen that breaks up the population by the OS to date. The right part of the chart shows my estimate for how the platform shares will evolve by this time next year. The non-OS share will still be above 50% but it looks like it might shrink even more rapidly after reaching a tipping point of half the market. (Note these charts do not show quarterly sales but installed base of each OS).

My hypothesis remains that smartphone user bases will be balanced (or fragmented, depending on your point of view) by operator portfolio decisions and chronic constraints on distribution.

That is why I am asking for the table, the graph is not very clear on what he is exactly saying/predicting.
I happen to also think that with quality hardware WebOS should be in the race. I am also interested in seeing BlackBerry OS and Windows Mobile 7 numbers. Also when does he think Android will overtake iOS. Only a table can communicate this things quickly and as intended by the author.

http://www.asymco.com Horace Dediu

During this time frame WebOS will fade. I am not aware of any new products in the pipeline from HP. They are likely to shift the focus to tablets and away from phones.

Noted. I am still skeptical. A lot more is needed. My main concerns are:
1. Hurd did not say that they are buying WebOS to be in the smartphone business, justifying it on other grounds.
2. Hurd is not there anymore
3. Almost all acquisitions of this type fail as talent flees
4. The top designer from Palm went to Nokia
5. Palm failed due to distribution problems. Being part of HP does not address this.

All this is circumstantial evidence, I grant. But it's part of a pattern.

GoodyBird

Would be interesting to elaborate on that in length.

macorange

Your hypothesis looks sound, but only for one year out. If you look two years out, my prediction is that there will be a very clear Big Two mobile OSes (iOS and Android).

Rob Scott

Okay, this is what I think of the numbers:

I think you are overly conservative about the move from dumb/feature phone to smartphone. I think the period before the iPhone and after is more instructive of what is likely to happen when the iPhone is available on Verizon. Yes, I think the availability of the iPhone to Verizon is going to be transformation, in a way that Android will never be.

With this in mind I think your iPhone/iOS numbers are rather pessimistic and you are over optimistic on Android and RIM. Why for example do you think Android will make those gains from 3.3% in Q210 to 13.9% in Q311? They are in all the carriers already. There are over 20 models available already. Most are free on contract right now. So, what are they going to do differently for them to make those gains in market share?

I also think you are overly pessimistic regarding WebOS. There is a lot of money in phones to be collected, I do not think HP will let it sit to be collected by the Android crowd. And if you look at Apples' strategy there is a lot of talking to each other between these devices that is about to happen. I am talking of Airplay/Airprint. I see iPhone to iPad to Apple TV all iOS devices. For HP to compete effectively in tablets they will need to compete in phones, etc.

That is my 2cents for now.

berult

-Mindshare pulls market share along in a flooded market place; ubiquity adds what quality subtracts.
-Supply side economics flattens the growth curve of a mono culture producer; quality adds what ubiquity subtracts.
-The train has left the station, just hop in for a plane ride…

Finally, if you could draw the perfect prototype of an antithesis to Apple you'd just have to write down the word "telco" on a piece of paper and make a phone out of it. In a telco/Apple partnership, there is a past and a present, but little more than short term future for it. And Verizon is the flag bearer of "unApple" reach into Mobile. It is an "either… of" proposition,not an "either… or " sublimation.

FalKirk

"Yes, I think the availability of the iPhone to Verizon is going to be transformation, in a way that Android will never be."

I'm not at all sure that the iPhone is coming to Verizon any time soon.

"I think you are overly conservative about the move from dumb/feature phone to smartphone."

I have just been assuming that app phones were going to devour dumb and feature phones until 70-80% of all phones were app phones. But I read an interesting article yesterday (unfortunately, I have no cite) that talked about how TiVo like devices soared and then abruptly stopped at about 30% market share. At that point all the people who wanted them, could afford them, could comprehend them had them. I think there are reasons to differentiate the TiVo/DVR experience from the upcoming App Phone experience, but still, it gave me food for thought.

http://www.asymco.com Horace Dediu

TiVo and game consoles and digital cameras and many other categories of products failed to reach population saturation. Refrigerators, (voice) mobile phones, televisions saturated the market near 100% of addressability. Determining which technology becomes ubiquitous and which is limited to a group of enthusiasts has been the subject of much theory. The theory I subscribe to is that it depends on the job that the technology is hired to do. If the job is very tightly integrated in the life of individuals and all individuals need this help, then it has potential. TiVo is hired to avoid commercials and that is a fairly limited job. Game consoles (Wii excepted) are hired to re-enforce juvenile boys' fantasies. This again is not a universal job. Mobile phones are ways to communicate with other people (vs. with places where people might be). That's a universal need. Smart/app phones are hired to enhance almost all aspects of one's life. It does not get more universal than that.

David Chu

@FalKirk

I agree. TiVo was never able to "cross the chasm.". They weren't able to make the jump from early adopters to mass market.

I believe smart phones will make the jump but it's hard to predict when. A lot of that has to do with context. The majority of the population still thinks of cellphones as a tool to call and text. It will take some truly 'killer apps' to win these customers. Apps that we have not yet seen.

Notice how on day one of launch the iPad included Pages, Keynote and Numbers.

David Chu

Stop responding so fast Horace! You keep beating me to the punch.

Tom

Imagine a customer in his fifties, having used a simple feature phone for 10-15 years, finally making the plunge into smart phones, and buying an android phone, a bad android phone, with bad buttons, and a bad keyboard, and a dim display, and a clunky browser. This suffering soul will long for the good old days of a simple feature phone, with no OS, just like before. Moving backwards would be moving up!
Worse yet, someone hearing about the iPad but buying a froyo tablet that can't run android apps! The good old days would look pretty good.

David Chu

LOL. Good one!

Nate

Does the customer in his fifties think of the iPhone and an Android phone as interchangeable? My father-in-law got an iPhone at 65, and he went to get an iPhone, not to purchase a new phone, if you understand my distinction….

ericgen

@Nate

I'd say that your father is better informed and is not the general case. A lot of non-technical people may get caught by some of these shenanigans until the knowledge becomes more mainstream.

An elderly friend recently swapped out her high-speed internet service from Comcast to ATT to save money. They were both 'high-speed'. She didn't know what questions to ask and didn't ask anyone first who did. She was somewhat aghast to experientially learn that the 768Kb ATT 'high-speed' she got was significantly different from the 20Mb Comcast 'high-speed' internet she had previously. It wound up being a somewhat expensive education to switch back.

I suspect there will, at least initially, be a lot of Android (or whatever OS) tablets sold to less knowledgable people because "they're just as good as an iPad".

The one saving grace this time may be the fact that other tablet vendors are going to have a very hard time matching, much less under-cutting, Apple's prices. Carrier subsidies appear to be the only way any of them stand a chance. The downside to that is the number of people fooled who will be locked into 2-yr service contracts with an unsatisfactory product. Over time this should also help Apple, but there's likely to be a lot of unhappy people along the way. At least they won't be able to blame Apple for it.

David Chu

I think the value of forecasts for non-comoditized goods is not in the numbers themselves but in the thought process to reach these numbers.

The key point I see Horace making is that the influence of the carriers is going to have the most effect on marketshare. We'll see if he is right or wrong, but I think he has a very sound case.

Rob Scott

That holds to a point.

Carriers' product roadmap reflects to a large extent what the customer base is demanding. With devices like the iPhone customers choose the phone before the network and the value proposition from the carrier. We know there is pent up demand for the iPhone from Verizon customers despite and in-spite of the fact that Verizon has been pushing Android.

What is important to note is that if a carrier decide to not offer/artificially limit the availability of a certain brand of phones the customers will either change networks and/or go and get it from the networks that offer it. As a network you do not want you customers to think about your competition when they are thinking of a device to use on your network, because soon they will switch.

Thats is why the carriers (including Verizon) have/must offer the iPhone as soon as Apple decides that it is time.

So, no, carriers have no choice.

FalKirk

"I think the value of forecasts for non-comoditized goods is not in the numbers themselves but in the thought process to reach these numbers."

That is very well said. I was reading the Gartner projections the other day (projecting out smartphone sales until 2014) and, while I love to think about the future, I was having a hard time understanding how they had any usefulness. As you said, projections are useful for the thought process needed to create the projections. Even bad projections can be useful (referring to Gartner's not Asymco's) since they can highlight flawed assumptions or trains of thought.

David Chu

Thanks FalKirk. I try my best as amateur analyst!

Vertti

Fantastic chart! Thanks! Very useful indeed.

Rob Scott

Apple’s job is to tell/educate the customer (any customer) about why they must go iPhone. Why the iPhone is better for the customer. Its customers that go to carriers and say give me an iPhone or I am out.

Two, if a carriers decides to not offer an iPhone for whatever reason they are only giving a competitive advantage to their competition, no board in its right mind would allow that, never.

To cement the iPhones stickiness and effectiveness, when Apple choses which features will make it to the next release they consider the ROI for the carriers that carry their phones. For the phone to remain in the roadmap it must absolutely make money (device margin) and bring in and retain customers (acquisitions).

Carrier put funding/subsidies on devices that deliver on the above. OS politics are not a consideration.

If Horace’s thesis is that the even split will be a result of some carrier premeditated strategy, he is wrong.

Now, I would like to hear why I am wrong.

David Chu

I won't argue with you that there is pent up demand for the iPhone on Verizon.

What I will argue is that you can't include that assumption in a forecast unless you specifically state so. A forecast must be based on a snapshot of what we see today, which is why they are often wrong. That's just part of the discipline of the art.

You can be right in your assumption in what will happen, but wrong in how you apply that reasoning.

http://www.asymco.com Horace Dediu

There is an inherent tension between the wishes of end users and the wishes of mobile phone operators. I think Apple is on the side of the users but that is not enough to break the control operators have over distribution. (It should be no surprise that operators are among the most despised organizations the world has ever known. Having an adversarial relationship with your customers is symptomatic of a deeper problem I won't get into here.)

Carriers don't have a master plan with a pre-meditated strategy to keep suppliers in check. They more much more unpredictably. There is a constant struggle between fear and greed. Apple appeals to their greed, but Google appeals to their fear. All I'm saying is that the most *likely* outcome is a balance between two very strong forces. I simply do not have any other means to declare the outcome because these is no way to measure these forces with any degree of comfort..

David Chu

There is no guarantee that Verizon will make the consessions needed to bring the iPhone to their network.

Before Android, many carriers were willing to make the tradeoff of giving Apple greater control over their phone in exchange for higher margins on data plans. With Android, they have an alternative option.

The carriers are driven by how much money they can extract from every customer. They believe that their customers are more loyal to the network than the phones. In some ways they have been proven correct. The best example is Verizon's 'Big Red' campaign that successfully portrayed AT&T as an unreliable network. People actually filed class action lawsuits against AT&T because of it.

I would say that Verizon thinks they are in the driver's seat. Apple is also unrelenting about control. This is a difficult situation to negotiate in.

Gandhi

All Apple needs to do is release the iPhone on T-Mobile and Sprint here in the US. That will leave Verizon as the only telco with all its eggs in the Android basket. As has been suggested on the posts here, the only reason Apple is not selling iPhone on Verizon is because Verizon wants to cripple it the way they do Android.

I suspect, with not as many subscribers, Sprint and T-Mobile are much more willing to agree to Apple's terms. T-Moble especially. They already sell iPhones in Germany. I am sure practically old iPhones sold to other buyers are going to T-Mobile subscribers (I have sold four iPhones this year – every one to a T-Mobile subscriber). While Sprint uses different tech, I doubt it is much of an issue for Apple. They already make slightly different phones for sale in China.

The situation of the Verizon iPhone is relatively unique. In most countries where GSM is dominant, the iPhone is available on multiple carriers and there are no compromises. Apple compromised MMS and tethering for AT&T but this relationship is "special" due to the peculiar CDM/GSM mix in the US. Despite going with a single carrier with network issues, the iPhone has spectacularly successful. With 70% of sales being outside of the US, Apple simply has no business case to loosen it's hold over what carriers control. Google/Android, meanwhile, has handed over the keys to the point that Verizon appears to see no value in even paying lipservice, nevermind respect, for the originator of the OS. This is an anathema to Apple's entire culture. So – either no ViPhone, or one that does not yield to Verizons desire for control.

It's also informative to examine the Canadian iPhone market. None of the carriers differentiate the iPhone. Apple does not permit any adverts for the iPhone that include other phones. As a consequence, people who walk into a store wanting an iPhone, buy one. Those who are undecided are shown the rest. The carriers keep the sale but the iPhone sales are driven by Apple not the carriers.

Tom

I think ATT has gotten a black eye because of the iphone's voracious data consumption. Eventho the ATT network is faster than verizon, no one was prepared for a 5,000% increase in data consumption since 2007. Imagine what would have happened if the iPhone had an exclusive contract with verizon since 2007! Their CDMA network would have been reduced to rubble. ATT has done rather well, all things considered.

David Chu

I agree that AT&T has done well considering.

Unfortunately the market doesn't care. They think AT&T and 'dropped calls' are synonymous.

The good news is that when AT&T figures everything out, they will be better prepared than Verizon to handle the future data consumption needs of US customers.

Tom

ATT currently is running three networks: the world's largest wifi network, an ubiquitous edge network, and they've beefed up their 3G network until it really can be called a 3.5G network. Next year is their year to add LTE. This doesn't mean instead of their previous networks, but on top of them!
CDMA still can't handle a phone call and process data (email, Internet, video, etc.) at the same time. What's up with that?

gctwnl

"CDMA still can’t handle a phone call and process data (email, Internet, video, etc.) at the same time"